Restaurant Risk Management
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Any establishment that sells, serves, or assists in the purchase or use of liquor (i.e. dram shop), which includes restaurants, bars, nightclubs, and taverns, is at risk for a liability claim as a consequence of patrons drinking to the extent that injuries or property damages are the result of their actions.
While one may assume that, since the inebriated person was at fault, they should be the one to pay, the reality is that the business that served the alcohol will likely be found liable for any injuries or damages that occurred as a result of the actions, behaviors, or conduct of a patron who drank too much. This is why liquor liability coverage is essential for any one who sells alcohol for consumption.
Common alcohol-fueled scenarios
It can be quite costly when a liability claim is levied upon a restaurant or bar as a result of damages or injuries caused by an intoxicated customer or patron. For example, if an intoxicated patron leaves a bar, gets into his or her car, drives, and commits a vehicular act of manslaughter, an alcohol-related claim is likely to occur. The families of any victims will most likely sue the bar for both civil and criminal damages.
Another common example, a restaurant catering an event serves alcohol, and guests subsequently become involved in a fight, and serious injuries are incurred. This is the type of situation where a business that sells or serves alcohol may be held liable for the actions of those inebriated persons being served. Liquor liability insurance will help cover the owner’s legal costs, court fees, and any civil or criminal damages awarded.
What liquor liability insurance covers
While the terms surrounding this policy vary, some commonalities ensue: Most states in the US require establishments that sell alcohol to carry liability insurance. Policies exclude the selling of alcohol illegally (for example, selling liquor to a minor), and most liquor liability policies are sold as a standalone policy or packaged with a general liability policy.
A good deal of alcohol-related liability claims filed against bars, taverns, and restaurants are a result of liquor-induced fights or altercations, most commonly resulting in an assault and battery allegation. Therefore, assault and battery coverage should be included in your policy. It’s vital that if your establishment serves alcohol, you protect yourself from potential financial losses by being covered with liquor liability coverage.
Running a restaurant is a labor of love in many cases. For this reason, you want to ensure success for your business no matter what. A restaurant risk management plan can be crucial to protecting your investment against a number of occurrences. Without the right insurance in place, even the most successful undertaking may face risks due to unforeseen circumstances.
What Is Risk Management?
When devising insurance coverage for your business, it’s important to recognize the specific risks such a business may entail. Restaurants offer particular challenges that may not be present in other industries. That’s why adequately assessing risk is so crucial to keeping your business afloat.
Risk assessment is the process of identifying risks to your particular circumstance. For instance, having coverage in the event of foodborne illness or contamination can be a necessary form of coverage for all restaurants. Other types of coverage may include those protecting against equipment breakdown, as well as coverage for things like crime and other wrongdoing.
Choosing a Plant That’s Right for You
Once you’ve identified the exact risks, it’s important to choose a plan that offers coverage against those events. Such plans can save a restaurant from financial devastation, which in many cases can occur due to a single incident. Before deciding on insurance for your business, be sure to secure restaurant risk management services to make certain you remain covered, no matter what.